DHL 2007 Annual Report Download - page 172
Download and view the complete annual report
Please find page 172 of the 2007 DHL annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.168
Deutsche Post World Net Annual Report 2007
The risks arising from the structured credit portfolio of Deutsche
Postbank Group are systematically and intensively analysed and closely
monitored within the scope of an internal project structure. Where im-
pairment testing resulted in impairments likely to be permanent, the
appropriate impairment losses were recognised.
With respect to other risk not related to structured loans, Postbank
maintained the relatively low risk pro le of its credit business during
, having comparatively low risk costs. Amongst other things, the
increasing credit risks in the retail segment in Germany were countered
by a restrictive scoring-based lending policy as well as by more e cient
and faster workout processes for loans in default. e additions to the al-
lowance for losses on loans and advances mainly result from the planned
expansion of the retail business in nancial year . In return, the
allowance recognised in previous periods could be reversed due to the
positive economic environment. e net addition was therefore signi -
cantly reduced. e Deutsche Postbank Group will continue to pursue
its risk-sensitive business policy in the future.
With regard to the allocation of risk capital, the Postbank Group has
been, and continues to be able to allow the business units su cient scope
to achieve business growth in line with its strategy. Should the turbu-
lences triggered by the US real estate market intensify notably and spill
over into the real economy, an additional nancial burden cannot be
excluded. No risks that could impair the Deutsche Postbank Group’s
development or even jeopardise its continued existence have been identi-
ed amongst the above-mentioned risk types.
Derivative fi nancial instruments
e Deutsche Postbank Group uses derivatives for hedging purposes as
part of its asset/liability management policy. Derivatives are also used
for trading. Foreign currency derivatives are mainly used in the form
of currency forwards, currency swaps, cross-currency swaps and cur-
rency options. Interest rate derivatives mainly consist of interest rate
swaps, forward rate agreements, interest futures and interest options;
in isolated cases, forward transactions in xed-interest securities were
conducted. Equity derivative contracts are signed in particular in the
form of stock options and equity/index futures. Only a few credit deriva-
tives (credit default swaps) were entered into. Credit derivatives (credit
default swaps) are basically the result of derivatives separated from syn-
thetic CDOs. e notional amounts represent the gross volume of all
sales and purchases. e notional amount is a reference value for deter-
mining reciprocally agreed settlement payments; it does not represent
recognisable receivables or liabilities. e fair values of the individual
contracts were calculated using recognised valuation models and do not
re ect any netting agreements. e derivatives portfolio is classi ed by
economic purpose as follows:
Derivative fi nancial instruments
€m Notional amounts Positive fair values Negative fair values
2006 2007 2006 2007 2006 2007
Trading derivatives 438,244 518,853 3,289 5,427 3,616 5,593
Hedging derivatives 43,568 34,052 485 421 958 873
Total 481,812 552,905 3,774 5,848 4,574 6,466
e following table presents the open interest rate and foreign currency
forward transactions and option contracts of the Deutsche Postbank
Group at the balance sheet date.